Giving evidence to the Leveson Inquiry on Tuesday morning, the Bermondsey and Old Southwark MP said the revelation that he had homosexual relationships, and the way it was reported by The Sun during the 2006 campaign, significantly damaged his reputation.

He told Leveson that he only agreed to give an interview after a journalist from The Sun approached him and "shared with me the fact The Sun had come by information which were records of telephone calls made by me".

"I admitted straight forwardly the nature of the calls that he said he had information I had made," he added.

The Lib Dem deputy leader said The Sun had subsequently not "accurately represented" him in both the titles and the content of stories published on the subject in the following days.

Hughes had denied in an interview with the Independent that he was gay. Having acknowledged he had had homosexual relationships in The Sun article, he said he was bisexual not gay so had not mislead the Independent.

He lost the 2006 leadership election to Sir Menzies Campbell having initially been confident of victory. In the end he came third, behind Campbell and Chris Huhne.

Hughes said there was "apparently a direct impact between that revelation and consequent press coverage and my political reputation and my chance of winning the election".

"I went from being odds on favourite and as strong a tip to win as Cameron was to win [the Tory leadership], to not winning," he said.

"It would have been great to have won. The consolation is running political parties in this country is an even more onerous burden."

He said today that he believed all of his phones had been hacked, including his mobile his office phone and his home phone. He said his voicemails were accessed in order to find out information about his friends to find stories for the papers.

"They [journalists] were trying to establish relationships between me and these people, neither of which were what they would have liked them to be," he said.

Campbell was replaced as Lib Dem leader by Nick Clegg in 2007, who then led the party into power in coalition with the Conservatives following the 2010 general election.